JA-00449 Distribution Box Display Unit W56HZV-22-D-0091_Redacted.pdf

CMO Control Number: 2022-042

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

JA-00449 - W56HZV-21-R-0070

1. Contracting Agency: The United States Army Contracting Command-Detroit Arsenal (ACC-DTA) is the procuring activity for this action.

2. Description of Action: ACC-DTA intends to award a sole source two year, Firm- Fixed-Price, requirement contract to New Eagle, of Ann Arbor, MI, (Cage 5EJ21), for the procurement of three types of electronic control unit (ECU) components used on the Rough Terrain Container Handler (RTCH) (RT240) vehicles. The RTCH is a key enabler of the Army supply distribution mission: Distribution Box, National Stock Number (NSN) 6110-01-671-2288, Display Unit, NSN 7025-01-671-2282, and Distribution Box, NSN 6110-01-671-2284. Army Working Capital Funds (AWCF) will be utilized.

3. Description of Supplies/Services: NSN 6110-01-671-2288 (ECU 791), NSN 7025-01-671-2282 (ECU 795), and NSN 6110-01-671-2284 (ECU 790), and respective manufacture part numbers 12638505, 12638510, 12638499, represent three types of ECU components used on the RTCH (RT240) vehicles. The RTCH moves and stacks intermodal freight containers of all classes of supplies and was originally fielded in 2001.

The RTCH fleet of 1,061 units is in the sustainment phase, and managed by The Tank Automotive and Armaments Command (TACOM) Life Cycle Management Command (LCMC). The deliverables are as follows: 124 each (ECU 791), 52 each (ECU 795), and 56 each (ECU 790) respectively over two ordering periods. The estimated value of this contract is $822,860.08 based on a unit price of $3,683.91 (ECU 791), $2,480.65 (ECU 795), and $4,233.24 (ECU 790).

4. Authority Cited: The statutory authority permitting other than full and open competition for this effort is 10 United States Code (U.S.C.) 2304(c)(1) as implemented by Federal Acquisition Regulation (FAR) 6.302-1(a)(2), “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirement.” Specifically FAR 6.302-1(a)(2)(ii)(A) and (B) provides that, “supplies may be deemed to be available only from the original source in the case of a follow–on contract for the continued development or production of a major system or highly specialized equipment, including major components, thereof, when it is likely that award to any other source would result in a substantial duplication of cost to the Government that is not expected to be recovered through competition or unacceptable delays in fulfilling the agency’s requirements.

5. Reason for Authority Cited:

a. Background: In 2013, the end item original equipment manufacturer (OEM), Independent Rough Terrain Center, reported to the Government that three ECUs were soon going to become obsolete. Additionally, the ECU technology was obsolete since it was designed in the early to mid-1990s. In 2017, the ECUs were no longer available and the Government started a project to reverse engineer the ECUs which resulted in the delivery of a technical data package (TDP) through Automation Alley. The project was part of a larger sourcing effort through Automation Alley contract W56HZV-18-C- 0184 via Ground Vehicle Systems Center (GVSC). It was competitively awarded, to multiple contractors, including New Eagle for various diminishing manufacturing sources and material shortages (DMSMS) and parts to keep businesses from leaving Michigan.

The TDP was not previously nor currently suitable for competitive procurement because the TDP is not in sufficient detail for competition and requires revisions. The Government does not own the TDP. There is capability within GVSC for TDP revision, however, it would have to be scheduled and budgeted. At this time, the Government does not have the computer software package (CSP) necessary for competitive re-procurement, and in particular, the Government does not have the software necessary to program the ECUs. The Government does not have the time, money or resources to revise the TDP nor support the computer software programming, reverse engineering, development and testing in-house at this time due to lack of funding and significant backorders.

The three NSNs included in this procurement, components of the Army’s RTCH, are:

Distribution Box, NSN 6110-01-671-2288, Display Unit, NSN 7025-01-671-2282, and Distribution Box, NSN 6110-01-671-2284. The RTCH OEM can no longer supply these components. New Eagle has amassed a substantial, unique knowledge base under contract W56HZV-18-C-0184. New Eagle analyzed the physical components to establish a foundation and the functionality instructions of the obsolete components. It then identified sources for the parts to assemble these components and has the capability to program the functional instructions to make them operational.

Utilizing parts that have not undergone verification testing will delay availability of these components to fulfill field demands. New Eagle has the history, requisite knowledge and specialized technical expertise required for successful performance, making the company uniquely qualified to meet the Government’s specific requirement for this procurement. No other alternative source is available to fulfill the current requirement in an economic and efficient manner. An award to any other source would result in substantial duplication of cost and unacceptable delay in fulfilling the agency’s requirements, not expected to be recovered through competition are detailed below:

Event Estimated Delay (Months) Duplication of Cost Procurement Lead Time 14 $180,000.00 RTCH Transport 3 $60,000.00 Reverse Engineering 12 $1,000,000.00 Functional Review 3 $30,000.00 Functional Testing 9 $300,000.00 Technical Data Review 4 $40,000.00 Totals 45 $1,610,000.00

b. Unacceptable Delay and Substantial Duplication of Cost:

Efforts to replicate the reverse engineering process involves the following steps:

Procurement lead time: The delay of 14 months is estimated to award a reverse engineering contract at an estimated additional cost to the Government in the amount of $180,000.00. This includes market research, preparing a statement of work, staffing, synopsis, solicitation, evaluation, and preparing award documentation.

RTCH Transport: The delay of 3 months is based on locating and transporting a RTCH to the contractor, essential for the reverse engineering effort at an estimated additional cost to the Government in the amount of $60,000.00.

Reverse engineering: The delay of 12 months and estimated additional cost in the amount of $1,000,000.00 for three ECUs is based on the actual engineering work by the contractor to analyze components, assess functionality, program the software and integrate into the final ECU modules. A reverse engineering effort includes work to clarify and define ECUs to function as the original components.

Design requirements are required to be broken down and clarified without any ambiguity. Technical information includes understanding the number, kind, and function of components needed as part of the RTCH performance.

Functional Review: The delay of 3 months at an estimated cost in the amount of $30,000.00 because the proposed replacement ECUs require review by Army maintenance experts to verify that ECU performance matches the original configuration.

Functional Testing: A delay of 9 months at an estimated cost in the amount of $300,000.00 because the reversed engineered ECUs

, for evaluation on the RTCH platform in a container-handling scenario. The evaluation

This evaluation is important because it assures the Government that the new ECUs will work in a field environment.

Technical Data Review: A delay of 4 months at an estimated cost in the amount of $40,000.00 is required for a technical data review at the conclusion of the evaluation period. The complete technical data requires evaluation to ensure the data is ready for follow-on procurements, critical to support future requirements.

The Government would endure an unacceptable delay of 45 months at an estimated cost of $1.61M to replicate the reverse engineering process to generate replacement ECUs through another contractor. New Eagle is the only company that can manufacture these components since they are the developers of the reverse engineered ECU parts. Contracting with a source other than New Eagle would delay the availability of replacement parts since another supplier would have to replicate the work of reverse engineering and validate the performance of the three components.

This contract action will ensure the Army can meet replenishment needs for these ECUs.

6. Efforts to Obtain Competition:

a. Effective competition: The Government will not seek further competition for this contract action for the reasons stated in paragraph 5 above. All notices required by FAR 5.201 will be posted, and any responses will be considered by the Government.

b. Subcontracting competition: A subcontracting plan is not required for this effort since the recommended contractor is a small business.

7. Actions to Increase Competition: The Government is taking no further action to increase competition at this time due to the reasons cited in Section 5 above. Only New Eagle has the knowledge and expertise necessary to satisfy this requirement. Although no further action to increase competition is contemplated at this time, the Government will continue to survey the marketplace and review our acquisition strategy should additional information be received. Any information received will be considered to determine if a competitive acquisition should be conducted or to determine potential future requirements. The Government does not own the necessary intellectual property data rights to enable competitive procurement.

8. Market Research: A Sources Sought Notice was posted to Beta.SAM.gov on February 22, 2021 for a Distribution Box and revised March 11, 2021 to include a Panel Dashboard and was open for 30 days. Six responses were received from: Neptech, Inc. doing business as Flexotherm (CAGE 4PKA3), LCL Electronics, Inc. (CAGE 2Y430), Means Engineering, Inc. (CAGE 1VM69), DCX-CHOL Enterprises, Inc. (CAGE 71CU6), Connectec Company, Inc. (CAGE 0EFR2), and Custom Manufacturing & Engineering, Inc. (CAGE 08LA6). None of the six companies met the Government requirements for this procurement.

Subsequently, after the Sources Sought Notice closed, the requirement changed last summer. As a result, the Panel Dashboard was removed and replaced with a Display Unit and second Distribution Box type.

Accordingly, on 15 March 2021, online market research was conducted by Combat Capabilities Development Command (CCDC) Ground Vehicle Systems Center (GVSC) Combat Engineer / Material Handling Equipment (CE/MHE) Engineering Team for publicly available sources of item Distribution Box (NSN 6110-01-671-2288) on web site https://www.wbparts.com/rfq/6110-01-518-8113.html. On 9 June 2021, online market research was conducted by CCDC GVSC CE/MHE Engineering Team for publicly available sources of this item (Display Unit NSN 7025-01-671-2282) on the web site:

https://www.asap-aerospace.com/nsn-parts/7025015550500/. On 9 June 2021, online market research was conducted by CCDC GVSC CE/MHE Engineering Team for publicly available sources of this item (Distribution Box NSN 6110-01-671-2284), on web site: https://www.wbparts.com/rfq/6110-01-622-6039.html. This research included searching for published material of newly built replacement units and other product information. As a result of an extensive internet search performed by the requirements office, no other vendor was found who meets the system specification for these items.

On December 16, 2021, New Eagle completed a market research survey, confirmed ability to produce the required ECUs and that the ECUs are not available in the commercial marketplace. There are no other commercial or non-developmental items available to meet Government needs or that could be economically modified to provide the required parts. The three ECUs are the only items that satisfy Government requirements.

9. Interested Sources: To date no additional sources have expressed interest in this item.

10. Other Facts:

a. Procurement History:

(1) Contract Number: W56HZV-18-C-0184 Contractor: Automation Alley Award Date: 18 SEP 2018 Competitive Status: Sole Source Authority: FAR 6.302-1(a)(2), Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements Remarks: This research and development, cost no fee, contract included a Low Rate Initial Production quantity of 43 each ECU 790, 58 each ECU 791, and 55 each ECU 795 through individual work directives

(2) No unusual patterns have been revealed by a review of the procurement history.

b. Procurement History:

(1) Contract Number: W56HZV-14-C-0270 Contractor: Automation Alley Award Date: 11 AUG 2014 Competitive Status: Sole Source Authority: FAR 6.302-1(b)(1)(i), Only One Responsible Source and No